China's two main bourses have issued rules to limit the sale of shares held by major shareholders. [File Photo: icsbw.com]

China's two main bourses have issued detailed rules to limit the sale of shares held by major shareholders, in an effort to prevent a free-fall within the market.

Senior managements of many major listed companies have voiced support for the new rules, including China Unicom.

The new rules apply to major shareholders with stakes of 5 percent or more of a listed company.

Those shareholders are forbidden from selling more than 1 percent of that company's share capital every three months.

The rules do not apply to the acquisition of shares, and they do not apply on the secondary markets.

China's securities regulator announced the restriction after stocks plummeted over 7 percent, activating the new circuit breaker mechanism and halting trading on Thursday.

But the circuit breaker has been suspended as it doesn't seem to have had the calming effect on the market that it was intended to create.

For more on the share market, CRI’s Shane Bigham spoke with Mike Bastin, Director of the China Business Centre at Soutampton Solent University based in London.